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19 April 2007
SEC-OGC Opinion No. 07-06.
, Transfer of Shares;
Documentary Requirements
Sir:
We write in connection with your letter dated 31 October 2006, a copy
of which we received on 9 January 2007, wherein you posed the following
queries regarding the transfer of shares of stock not traded nor listed in the
stock exchange:
1.
2.
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Note that for the transfer to be valid against third parties and the
corporation, the same must be recorded in the corporate books. An
unrecorded transfer, though valid as between the parties, cannot be effective
as against the corporation. The rights of a stockholder accrues only upon entry
of his name in the books of the corporation.
Anent your second query, non-payment of capital gains tax does not
affect the validity of the transfer as between the seller and the buyer. However
if the capital gains tax is not paid, the sale or the transfer of the shares shall
not be registered in the books of the corporation by the transfer agent or
secretary of the corporation pursuant to Revenue Regulation No. 2-82 of the
Bureau of Internal Revenue (BIR).We advised you to further clarify this with
the BIRwhich has jurisdiction on this matter.
It shall be understood ~hat the opinion rendered is based solely on the
facts disclosed in the query and relevant solely to the particular facts raised
therein and shall not qe used in the nature of a standing rule binding upon the
Commission in other case whether of similar or dissimilar circumstances.2
rjL
VERNETTE G. UMALI-PACO
General Counsel
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